Insurance

Slideshow

Brokers respond to SCOTUS decision

Adam Bruckman, President and CEO, Digital Insurance, Atlanta

While the Supreme Courts decision about the Patient Protection and Affordable Care Act determined the outcome of one of the most significant judicial cases of the century, no one has yet addressed one of the most pressing issues facing our nation: the rising cost of health care. Our country still does not have measures in place to control a system that is on an unsustainable cost trajectory. If we are to effect meaningful change, we are obligated to devise methods to curb rising expenses.

The solution is a system that produces knowledgeable and engaged health care consumers. This can only be achieved through innovation  not through mandates, regulation and government programs. Evolution must be led by the private sector and requires collaboration between benefits advisers, employers, insurance carriers, providers and consumers.

These stakeholders must develop education and advocacy initiatives to drive profound employer-employee involvement. Ultimately, the remedy will harness technology and build transparent processes. It will offer access to comparative information about quality, outcomes and price so individuals can become better health care consumers. And, it will create effective wellness programs that change behavior and inspire healthy lifestyles.

A successful transformation will take leadership and a commitment from companies willing to operate on the vanguard of this type of reform. Until we are dedicated to working at this level, regardless of what happens in the White House, at the Capitol or in the highest court of the land, not much is going to change.

This ruling offers some clarity on the future of the health insurance industry and allows American individuals, families and businesses to adjust to the law. While we still have concerns that PPACA does not address the true drivers of health insurance costs in this country, and the law is having a huge and costly compliance burden on American employers, it is our responsibility as industry leaders to move forward within the constraints of the law to help Americans access high-quality, affordable health care.

There are still legislative actions that can be taken to fix parts of the law, and though we support many of these efforts, our focus is to help our customers transition to the regulations, policies and procedures the law outlines.

As insurance professionals, our job is to assure full-scale implementation of PPACA will continue and to help our individual and employer clients with the transition and compliance requirements the law entails. Our efforts to enroll individuals in high-risk pools, Medicare, Medicaid and CHIP programs will continue as we work to lower the number of uninsured Americans.

It is imperative that the Administration and regulatory agencies provide information in a timely manner on the many aspects of PPACA that remain unclear. The changes to pricing and standards of coverage, employer responsibilities, uncertain tax provisions, state exchanges and many other issues must be addressed in a clear and cost-effective manner that provides individuals, families and employers continued access to proven tools that enable agents to provide affordable coverage.

We look forward to having ongoing dialogue with lawmakers on both the federal and state levels to find solutions that ensure all Americans receive the benefits they deserve at a price they can afford.

Although we now know that PPACA has been found to be constitutional and will be upheld largely as passed, it will likely take several months to sort through the implications, political and otherwise.

The current state of our health care system is not a result of PPACA. We have seen the cost of health care rising too quickly and employers exiting the employer-based health care system for years. Our health care system as a whole has not been working as efficiently as it could, as exemplified by the fact that our costs are higher but our outcomes are lower than many other countries. Health care reform in the form of PPACA may not be perfect, (in fact it may be far from perfect), but it was time for a change. It was time for a major step in innovation, and great strides need to continue to be made.

Fortunately, the legislation preserves a role for the employer-based health care system. Employees continue to place high value on benefits, some studies showing a dollar for dollar importance as compared to salary. Employers still want to be able to offer an attractive package for employees, and for now, that package includes benefits such as medical coverage. Employers financial and human resource professionals will continue to evaluate whether they want to include health coverage as part of the compensation and benefits package, just as they have done for years. They will continue to rely on their benefit advisers to help them navigate through the compliance requirements that come as part of legislative action as they incorporate required or desired changes into their strategic plans. It is incumbent upon us as trusted benefit advisers to keep abreast of the guidance as health care reform continues to evolve to position ourselves as effective strategic partners into the future.

John OConnell, C.M. Smith Agency, Inc., Glastonbury, Conn.

Regardless of where one stands on the political spectrum, work must continue to advise clients on the implications of the Act. As most advisers are aware, many group medical clients took great pains to comply with the tactical requirements of the law which were imposed in 2010 and 2011. However, the fresh challenge today is to frame the finality of the ACA within a clients longer term strategic priorities as evidenced within their employee benefit plan. Examples include the role of the health care exchanges (for smaller employers), the employer mandate, and using population health management methods to improve the health status of the covered participants to slow the pace of cost increase.

Perry Braun, executive director, Benefit Advisors Network, Cleveland

The Supreme Court of the United States has released its opinion that the health care reform legislation is constitutional and the market  defined as employer, individuals, provider health systems, individual States and insurance markets  has a clearer understanding of the future.

Some individuals, they have been in a holding pattern, waiting to see what direction this was going to take before implementing their plans. Still for others, this decision raises more questions and issues that will have to be addressed.

For example, now that the Court has concluded that the law is constitutional, for the many states that have not invested in, nor put into place an exchange, the guidance within the law is that an exchange must be operational by 2014. How the state will comply by the timeframes outlined, how employers within that state will adjust their plans, how individuals will purchase health insurance products with an expectation that an exchange is available to them are just a few of the questions that fall out of this ruling. For some, the short term will represent a stressful time.

For these states that have not implemented an exchange, they will need to assess the timeline and tasks in order to operationalize an exchange by the 2014 deadline. One option for those states that have yet to implement an exchange could be to partner with a state or entity that has an operating exchange.

For the consumers, there are several questions to triage through: One, what are my options? Second, how do I receive information to make an informed choice  through my employer; the insurance market; state government; or the federal government? Where should the consumer start?

Many will be wondering how the ruling will impact the economy, which remains sluggish. It is probable that companies will remain in a holding pattern on hiring, investing in people, plant and equipment while the employer implements the remaining administrative, reporting and compliance requirements of the Act and what is expected to be additional administrative expense.

The Act was attempting to attack the rising cost of health care and is focused on only one side of the equation  supply of services and reimbursement. Insurance market reform, reforming and regulating the distribution and marketing, as well as regulating the development of insurance premiums and how you reimburse and compensate providers are not the only aspect of the cost equation. The Act does not address the demand side of the equation, which is where an equal amount of attention should be given.

While much about [PPACAs] implementation remains uncertain, what is now settled is the constitutionality of the individual mandate provision, which requires all Americans to have health care coverage. Benefits producers and employers can now refocus their efforts toward working to understand and comply with the provisions of the law. Now, more than ever, employer groups both large and small will need guidance and direction from an informed benefits producer to clearly navigate the complexities of the law in the coming years. Back to work!

David Martin, president, David Martin Agency, Inc., Edina, Minn.

Well, the entire PPACA is held to be constitutional. As the mandate is simply a tax. In some ways, this is a pragmatic result and eliminates the widespread confusion that otherwise prevailed.

Obviously, many components of PPACA already had impacts that would not have stopped even if the law was repealed. But now is the time for a full-speed ahead mentality to comply with the law that has survived. To some degree, the decision to uphold PPACA provides the clearest direction in which steps to take. It is The Law. However, I think much is yet in play. There are regulations yet to be defined from the Department of Health and Human Services, and there are political races yet to happen and there is action on many governmental levels that has yet to be taken.

The impact on the states might prove to be the most intriguing. Although each state is held to comply with the law, the states can consider PPACA as a minimum standard and move forward from there. Some states continue to push greater government solutions on a state level (for example, the single-payer initiatives in Vermont).

In Minnesota, we have an administration under Governor Dayton that also believes in single payer. The PPACA provides a foundation to bring about even greater changes. The work done to date on the MN Insurance Exchange provides an example on how these local changes may not be friendly to brokers working with small group and individuals. Additional powers were granted to the State governments in this ruling  the lesson here is that local politics will loom large.

Michael Saab, partner, PWA Insurance Services, Sacramento, Calif.

While there has not been much time to digest the Supreme Courts decision to uphold the Affordable Care Act we know employers must be prepared for 2014 and the changes that will soon be coming. For many employers it may mean they decide to provide medical coverage through the private market, their state health exchange or choose to continue as is and pay the penalty if it applies to them. Overall, there is both good and bad with the ACA and our health care system needs an adjustment. As benefit consultants we will need to be educated, savvy in our role and encourage our clients to adopt better strategies to reduce costs without it coming at a reduction in benefits. That should always be our focus regardless of what is happening around us. For individuals, the timing couldnt be worse as unemployment remains high and Americans struggle to pay their everyday bills. While the payout for them is health coverage, it does not mean savings and there are a number of items that must happen before we ever see any cost decrease.

Although the decision states that the individual mandate as a mandate is unconstitutional, the Court nevertheless held that the individual mandate not as a mandate but as a tax on those who do not have insurance coverage. While that is surprising to many, it does not fundamentally change the impact on employers and their plans. Very few scholars thought that the entire act would be overturned, so the employer mandates and the coverage requirements for employers were never seriously challenged. Therefore, the planning and work that employers were doing before the decision will now be implemented (or that planning accelerated).

Employers and their advisers will now continue to move forward with their plans. While the individual mandate was the real question at issue, it really did not fundamentally change the options for employers. The issues regarding employer plans versus individual marketplace for insurance for their employees will still be an issue employers will grapple with. The penalty (or tax as the Supreme Court has now labeled it) is still relatively small and with the hint that taxpayers might just refuse to pay the tax, it remains to be seen whether that tax will be enough of an incentive to get taxpayers to purchase insurance (or otherwise seek coverage) in enough numbers to make the insurance reforms work within the context of the private insurance market. If that market does not offer a cost-effective alternative to an employer plan (and given the cost impact of the insurance reforms that is not only possible but likely) the employer-provided market will still likely offer the best option for most employees.

Samuel H. Fleet, president, AmWINS Group Benefits

The U.S. Supreme Court decision on the Patient Protection and Affordable Care Act marks an historical event for the health care industry. However, while many will be analyzing what effect the ruling may have on the future of health care, one outcome we certainly wont see soon is a resolution to the health care crisis that America faces. Thats because the Courts ruling does not address the real challenges facing policy makers  including an inevitable collision between rising health care costs and the mounting federal debt.

The United States has a national debt of about $15 trillion, or 97.2% of our Gross Domestic Product. In addition to unbounded debt for entitlements like Social Security and Medicare, our debt equates to more than $550,000 for every household in America. At the same time, health care expenditures continue to rise. In 2010, about $2.6 trillion was spent on medical care with government picking up about 45% of the tab. By 2020, the expense is expected to reach $4.6 trillion, with the governments share reaching over 50%.

In addition to the threats our country faces financially, a lack of transparent data-sharing that would provide unparalleled insight for determining how diseases should be managed to ensure the best outcomes and lowest costs, and with provider reimbursements structured in a way that incentives them to generate more procedures instead of higher quality care  health care in the United States is a system that cannot survive.

The good news is, changes are taking place  and not because the implementation date for PPACA is looming. Businesses of all sizes are turning away from traditional fee-based service to risk-based systems, such as accountable care organizations and cooperative insurance pools that put positive health results in the drivers seat of policy decision making. We are also seeing a rise in intermediaries that specialize in transparent, collaborative business models that can use core competencies in technology, administrative processes and data analysis to bring medical care providers and insurers together to promote wellness and coordinated care.

Unchecked and unexplainable insurance premium increases, and the struggle by companies to reduce health care costs by finding alternatives, are driving a titanic shift in how risk is assumed. Businesses are successfully taking matters into their own hands. Slow now but with increasing momentum, this type of alternative thinking is what will truly change the face of health care in the United States.

Upheld by the Supreme Court in a 5-4 decision, The Patient Protection and Affordable Care Act remains the law of the land. Employee Benefit brokers and consultants across the country react and share their plans for moving forward.